Electric car sales soar ahead of pay-per-mile tax raid
The number of EVs and PHEVs sold last year grew by 23pc and 11%, with a record 473,000 battery-powered and 225,000 Plug in hybrid cars sold overall in 2025, according to data from SMMT.
Reporting in the Telegraph, Charles Lester, from Benchmark, said sales had been boosted by government subsidies – like the EV grant scheme and the zero emission vehicle (ZEV) mandate – with manufacturers under pressure to hit electric car sale quotas to avoid fines.
He said: “A big driver of this is the ZEV mandate. But then, also towards the latter half of 2025, we saw battery electric vehicles added to the list of vehicles that can get a subsidy.”
Mr Lester added: “What we’re expecting in 2026 is for those subsidies to drive sales further.”
The rise comes despite fears that a 3p-per-mile tax on EVs announced by Rachel Reeves in November will put off potential buyers, with the Office for Budget Responsibility (OBR) estimating it would lead to 440,000 fewer sales in the next five years.
Mr Lester said there was no sign yet of an impact on sales from the pay-per-mile tax – which will come into force in 2028 – and Benchmark expected EV sales to be supported by other measures in 2026 for the time being.
These include a grant scheme, announced by Heidi Alexander, the Transport Secretary, in July, with cars such as the Nissan Leaf qualifying for a discount of up to £3,750.
Mr Lester said there was evidence to suggest the scheme had helped to increase sales in the final three months of 2025, with 183,000 EVs sold compared to 160,000 over the same period a year earlier.
Top EV Models for the year
For the year totally EV sales well only 23.4% of the market below the 28% set by the zed EV mandate. Tesla with the model 3 and the model Y represented 45,000 units with Audi in second place with 27 1000 units from the Q4 and the Q6. What is surprising is that none of the low-cost vehicles supported by the Ev grants show on the top selling list implying the eaves are still seen as luxury cars reinforcing that most sales are to businesses not consumers.
The three lowest prices EV – the Volvo EX30, the KIA EV3 and the Skoda Elroq start at around £33,000.
With the recent introduction of the Model Y standard at just £42,000 or just £299 / month of PCP we expect Tesla to continue to be top of the sales charts for 2026.
SMMT Data
Total UK sales for 2025 were just over 2,000,000 units. With 46% pure petrol, 14% with mild hybrid, 5% diesel and 23% pure EV and another 11% Plug in Hybrid.
EV and PHEV saw 24% and 35% yoy growth However total sales are still well below pre Covid levels and in line with sales from 2012.
New car registrations topped two million units in 2025 – for the first time this decade, according to fresh SMMT data. It reflects a robust 2025 performance, with demand up 3.5% despite a tough economic setting and turbulent geopolitical backdrop – but all eyes were, of course, on EVs. Zero-emission vehicle uptake continues to grow, up 23.9% thanks to an ever-expanding market offering spanning more than 160 different cutting-edge EV models.
Such wealth of choice was not enough, however, to drive demand to aspired levels, with EVs representing 23.4% of the market – below the 28% set by the ZEV mandate, and despite an unprecedented £5 billion in discounts to attract drivers. Such a situation is patently unviable in the long term, and while government rightly stepped in with the Electric Car Grant – which is helping – only around a quarter of models are eligible. Mixed messaging with the proposed eVED tax, meanwhile, and higher public charging costs, risks confusing the public and diminishing the impact of industry investment. Government must, therefore, bring forward a review of the ZEV transition to ensure a sustainable market that aligns ambition with real-world demand.
Source: SMMT:
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